Clive Palmer referred to Australian authorities over role in nickel business

Embattled businessman turned politician Clive Palmer is likely to face further intense questioning, this time by Australia's corporate regulators, after the administrator for his nickel business found he acted as a shadow director.

In its report to creditors released on Tuesday, Queensland Nickel (QN) administrators FTI Consulting recommended the company be placed in liquidation, finding the company may have traded while insolvent and alleging the self-described billionaire breached Australian laws.

"Our observations indicate Mr Palmer, a former director of the company, appears to have acted as a shadow/defacto director of QN at all material times from February 2012 up to the date of our appointment on 18 January," the report found. The report said Palmer had approved and directed expenditure requests and also dealt with staff on operational matters.

If proven, Palmer could be liable for debts in excess of 100 million Australian dollars (76.29 million U.S. dollars) accrued before QNI was placed into voluntary administration on Jan. 16.

Palmer, however, denies being a shadow director, instead claiming he was part of a six-member of a spending committee deciding the fate of QN's funds.

The administers were also critical of the management's performance, including sole and registered director and Palmer's nephew Clive Mensik, alleging they had breached their duties through transactions not in the interests of the company.

The administers found 224.3 million Australian dollars (171.14 million U.S. dollars) had been transferred from QN's funds to other Palmer-related companies, including 21 million Australian dollars (16.02 million U.S. dollars) to Palmer's political party, the Palmer United Party (PUP). Of the total amount, 189.3 million Australian dollars (144.41 million U.S. dollars) in loans had been forgiven.

"It is our view these transactions have appropriated assets otherwise available to QN and its creditors for the benefit of director-related parties, and because of these transactions, caused detriment to QN," the report said.

Palmer is now in the headlights of Australia's corporate regulator, the Australian Securities and Investment Commission (ASIC), as FTI Consulting is required to forward its findings and evidence if it appears a past, or present officer or member of the company may be guilty of an offence.

FTI Consulting found there was evidence of breaches of the corporate act, and further, "there are indications the directors may be in breach of their common law and fiduciary duties."

The recommendation to liquidate QN will now need to be approved at the creditors meeting next week.

The sacked refinery workers welcomed the administrators decision as it would now mean they would have access to an Australian government scheme that will pay some of their entitlements to help meet ordinary day-to-day and week-to-week living expenses.

"(But) it's fair to say it will be a fraction, under the federal scheme, of what they would otherwise be entitled to," Australian Workers Union (AWU) Queensland branch secretary Ben Swan who represents the sacked workers told local media on Tuesday.

Palmer has wrestled back control of the Yabulu nickel refinery under new entity Queensland Nickel Sales (QNS), and is seeking to resume operations in July 2016. Regulatory approvals and supplier agreements, however, remain outstanding. Endit